By Jonathan Stempel
NEW YORK (Reuters) -A Harvard Business School graduate accused of defrauding fellow alumni out of millions of dollars by claiming he could identify where Warren Buffett's Berkshire Hathaway would invest next has been indicted for fraud, federal prosecutors in Manhattan said.
Vladimir Artamonov, 46, formerly of Manhattan, was arrested on Thursday in Elkridge, Maryland, where he now lives, and charged with securities fraud, wire fraud and investment adviser fraud.
New York Attorney
General Letitia James has also investigated Artamonov, and in February 2024 won a court order blocking his alleged fraud from continuing.
Philip Cohen, a lawyer representing Artamonov in James' case, declined to comment on the indictment.
Cohen has been serving as a so-called "guardian ad litem," after Artamonov claimed to suffer from debilitating mental health including "ongoing psychosis."
Prosecutors said Artamonov told investors he knew which stocks Berkshire would buy by reviewing state regulatory filings from the Omaha, Nebraska-based conglomerate's insurance units.
Authorities said Artamonov promised his "air tight" insight enabled him to buy stocks before Berkshire revealed its own purchases, generating returns of 500% or more with little risk, through a strategy he called Project Information Arbitrage.
Instead, the 2003 Harvard graduate allegedly bought risky short-term options that had nothing to do with Berkshire, and when investors demanded their money back he repaid nothing or used money from newer investors in a Ponzi-like fashion.
Prosecutors said Artamonov misappropriated more than $4 million, used some for personal expenses, and repaid less than $400,000.
"Vladimir Artamonov betrayed investors, including friends and former Ivy League classmates, by promising a low-risk, high-return investment strategy, when in fact he gambled away investor money," U.S. Attorney Jay Clayton in Manhattan said in a statement.
Prices of stocks that Berkshire buys regularly rise after the investments are disclosed.
For example, shares of health insurer UnitedHealth Group rose 12% on August 15, after Berkshire revealed an unexpected $1.57 billion stake.
Berkshire and Buffett have not been accused of wrongdoing. Buffett's assistant did not immediately respond to a request for comment.
According to court papers, Artamonov was also a managing partner of the hedge fund Coastal Investment Management through at least February 2023.
The case is U.S. v. Artamonov, U.S. District Court, Southern District of New York, No. 25-cr-00420.
(Reporting by Jonathan Stempel in New York; Editing by Daniel Wallis)
